Multi-factor algorithm for facilitating electronic payments to payees

ABSTRACT

The payment service provider receives a request to make a payment to a payee on behalf of the payor, via a wide area network. The payment service provider first determines whether or not first payee identity information for the payee to be paid pursuant to the received request, which is included in first data associated with the payor, has an associated indicator indicating that the payee to be paid is payable by crediting that payee via electronic funds transfer. If not, the payment service provider next determines whether or not respective second payee identity information, which is included in second data associated with multiple payees and identifies each of the multiple payees payable on behalf of multiple payors by crediting that payee via electronic funds transfer, identifies the payee to be paid. If so, the payment service provider directs the requested payment by crediting, via electronic funds transfer, a deposit account represented by the deposit account information associated with the respective second payee identity information identifying the payee to be paid in the second data.

CROSS-REFERENCE TO RELATED APPLICATIONS

This application is a continuation of application Ser. No. 10/205,615,filed Jul. 26, 2002, and entitled “ELECTRONIC PAYMENTS USING MULTIPLEUNIQUE PAYEE IDENTIFIERS”, the contents of which are incorporated byreference herein in their entirety.

FIELD OF THE INVENTION

The present invention relates to electronic commerce and moreparticularly to processing information associated with payees of anelectronic commerce service provider.

BACKGROUND OF THE INVENTION

Today a myriad of electronic commerce services exist. One popularelectronic service is the service of making payments to payees on behalfof payors. This service is often called an on-line payment service,though neither the payment request nor the payments themselves actuallyhave to be made on-line. Provision of an on-line payment serviceincludes a payor (customer of a payment service provider) directing thepayment service provider, typically on-line, though it could be viatelephone or another form of electronic communications, to make apayment on behalf of the payor to a payee (which may or may not be acustomer of the payment service provider). These payments are often billpayments, though other types of payments are also common, such asperson-to-person payments and payments for goods or services purchasedvia the Internet or other computing networks. Upon receipt of a paymentrequest, the service provider makes payment to the payee on behalf ofthe payor. The assignee of the present application, CheckFree ServicesCorporation, is a pioneer in providing on-line payment services.

FIG. 1 depicts operations of a typical prior art on-line paymentservice. A payor 100 transmits a payment request to a payment serviceprovider 105. The payment service provider 105 could be CheckFree or anyother payment service provider. The payment service provider 105receives the payment request, processes the request to determine a formof payment, and then pays payee 110 based upon the received paymentrequest and determined form of payment. As shown, the determined form ofpayment can be check, draft or electronic funds transfer.

In making payments on behalf of payors, a payment service provider canmake payments to a payee (that is, deliver funds) by one of severalmethods. Payment can be made by check drawn on an account associatedwith the payment service provider, can be made by a draft drawn on anaccount associated with the payor, and can be made electronically, aswill be discussed further below.

As will be understood by one skilled in the art, electronic payments aremore cost effective for both a payment service provider and payee thanpayments made by check or draft (paper payments). Paper payments haveinherent disadvantages over electronic payments. Processing costs(including generation and handling) are higher for paper payments thanelectronic payments. Also, paper payments take longer to complete thanelectronic payments. Another disadvantage with paper payments is thatsuch payments are not easily reversible, while electronic payments(based upon agreement with a payee) are. As a result of thesedisadvantages, it is preferable for payments to be made electronically.

For payment made by check or draft, remittance information (such aspayor name, account number with the payee, etc.) is typically deliveredto the payee along with the check or draft. For electronic payments,remittance information is typically delivered electronically. It shouldbe noted that electronic remittance information can be part of anelectronic payment, or a separate transmission.

An electronic payment is made by electronic funds transfer directly to apayee's deposit account from an account associated with a paymentservice provider. Typically, electronic payments are made to only large,sophisticated commercial payees, though other types of payees couldcertainly receive electronic payments. In one form of electronic fundstransfer, CheckFree utilizes the Federal Reserve's Automated ClearingHouse Network (ACH). For payments made via the ACH Network, the payeeprovides CheckFree with information identifying the payee's depositaccount maintained at a financial institution. CheckFree transfers fundsto the payee's financial institution via the ACH Network, which in turncredits those funds to the payee's deposit account. CheckFree alsotransmits remittance information via the ACH Network to the payee'sfinancial institution, which in turn delivers that remittanceinformation to the payee. While fees associated with using the ACHNetwork are low, CheckFree's use of this payment channel is limited tothose payees whose financial institutions offer remittance advicedelivery service and who utilize their financial institutions'remittance advice delivery service. One drawback to the use of the ACHNetwork is that there is no available listing of all payees who areaccessible via the ACH Network. Thus, the only payments that can be madeto a payee by a payment service provider via the ACH Network arepayments to those payees who have provided a payment service providerwith deposit account identifying information.

For some electronic payments, CheckFree has utilized networks maintainedby credit card companies, such as MasterCard's RPS service, and VISA'sE-Pay service. In such payments, funds and/or remittance informationmove to a payee via a credit card company's network. This service hasbeen attractive to many payees whose financial institutions do not offera remittance delivery service. While fees charged by credit cardcompanies for use of their networks are slightly greater than the feescharged by the Federal Reserve System, an advantage to such systems isthat credit card companies routinely publish directories of all payeesas well as the data required to send payments to those payees throughthe credit card networks.

There still remain payees who are not associated with financialinstitutions which offer remittance advice delivery service, notassociated with any credit card company network, or simply choose not toutilize either of these services. In response, CheckFree developed itsproprietary DIRECT SEND system in which CheckFree utilizes the ACH tosend funds to the payee, but independently sends an electronicremittance data file to the payee. This innovation dramaticallyincreased the number of payees receiving electronic payment fromCheckFree.

The combination of electronic payments via the ACH Network, via a creditcard network, and via the DIRECT SEND system account for the majority ofpayments made by CheckFree on behalf of payors. The remaining paymentsare typically made by either check or draft, a determination of whichcan be based upon risk processing methods.

Paper payments can be divided into two categories: payments tobusinesses without electronic remittance capabilities, and payments toindividuals. There are varied reasons why these payees do not receiveelectronic payments, including, as discussed above, no relationship withfinancial institutions which offer remittance advice delivery service,no relationship with a credit card payment network such as MasterCard'sRPS network or VISA's E-Pay network, as well as a low volume of receivedpayments from CheckFree, making DIRECT SEND somewhat cost prohibitive,especially for individual payees. Accordingly, a need exists to overcomethese barriers to increasing the number of payments made electronicallyto payees by payment service providers.

FIG. 2 depicts a typical payment processing system 200 maintained by apayment service provider. The depicted payment service provider system200 could be associated with any payment service provider. System 200includes a server 202, an electronic payee database 212, a rulesdatabase 210, and a memory 230. It will be understood that othercomponents could be, and typically are, included in such a system 200,such as communications interfaces and other databases, though thesecomponents are not depicted in FIG. 2. It will also be understood thatthe memory 230 could store one or more of the various databases, as wellas programming which drives the operation of the server 202, as well asother data processed by the server 202 and generated by the server 202.

As shown, server 202 is configured to receive payment requests 201,which each include at least a payment amount and information identifyinga payee. This identifying information could be merely a payee's name, orcould include further identifying information such as payee address,phone number, or payor's account number with the payee. If only apayee's name is supplied by the payor, it will be understood by thoseskilled in the art that the payor has previously supplied additionalpayee identifying information to the payment service provider. Thisinformation would be stored in memory 230.

Information identifying payees which can be paid electronically isstored in the electronic payee database 212. These payees have supplieddeposit account information to the payment service provider such thatthe payment service provider can make electronic payments to thesepayees. For non-electronic payees, who currently receive paper payments,the process to become an electronic payee includes multiple steps,including supplying deposit account information as well as criteria fordelivery of remittance information. This can be a time consumingendeavor that many payees have chosen not to participate in. According,a need exists for an enrollment technique to become an electronic payeewhich overcomes this barrier to increasing the number of electronicpayees.

Upon receiving a payment request 201, the payment service provider'sserver 202, among other processing, determines if the indicated payee isincluded in the electronic payee database 212. That is, the serviceprovider determines if payment to that payee can be made electronically.The process for determining if the payee is included in the electronicpayee database 212 is driven by rules stored in rules database 210. Therules dictate combinations of payor and/or payee identifying informationto use in determining if any given payee is included in the electronicpayee database 212.

Large payees typically have multiple remittance centers. A remittancecenter is a location to which payments and remittance information from apayor to a payee are delivered. That is, for a large payee, a firstpayor may be required to remit payment to a first remittance center,while a second payor, perhaps geographically distant from the firstpayor, may be required to remit payment to a second remittance center.As shown in FIG. 3, the electronic payee database 212 includesinformation identifying multiple payees, i.e., payees 1-3. The storedinformation includes payee name 301 and information identifying one ormore remittance centers 305. As shown payee one is associated with threeremittance centers. Payee two is associated with a single remittancecenter and payee three is associated with two remittance centers. Itshould be understood that stored remittance center informationidentifies deposit accounts to which payment should be credited as wellas locations, electronic or physical, to which remittance informationshould be delivered.

For a payee having multiple remittance centers, the payment serviceprovider must determine the proper remittance center for a particularpayor requesting that payment be made to the payee on his or her behalf.Rules stored in the rules database 210 are not only used to determine ifa payee is included in the electronic payee database 212, but todetermine the proper remittance center to which payments and/orremittance advice should be directed if an electronic payee has multipleremittance centers. These rules can be tailored for specific payees,based upon a specific payee's business rules.

In one implementation utilized by CheckFree, the rules are used toidentify a proper remittance center based upon the payor's zip code.Thus, in its most simplistic form, a proper remittance center isselected based upon the zip code in which the payor resides. It shouldbe noted that geographic location is not the only criteria available fordetermining a proper remittance center to which a payor should remitpayment.

The rules database 210 can also store rules to identify electronicpayees and/or identify proper remittance centers based upon unique payeename variations, payee account number structures, as well as payeeaccount number ranges. Thus, for example, based upon a payee namesupplied by a payor, a proper remittance center could be selected. Thus,a single company could be doing business under various names. Also,based upon the payor's account number with the payee a proper remittancecenter could be selected.

While the use of rules has been successfully utilized by payment serviceproviders in identifying electronic payees and/or determining properremittance centers, deficiencies have arisen in the use of rules. Forexample, certain payees do not have remittance centers based upon payorzip codes. That is, two payors residing in the same zip code may beassociated with different remittance centers for the same payee. Also,often two or more electronic payees are physically located in the samezip code. And, many payees do not have, for example, standardized namevariations which can be used to identify electronic payees and/orremittance centers or standardized payee account number structure orranges which can be used to identify remittance centers. Accordingly, aneed exists for a technique to identify information associated withelectronic payees and/or proper remittance centers for whichstandardized rules cannot be utilized to do so.

OBJECTS OF THE INVENTION

It is an object of the present invention to provide a technique toincrease the number of payees receiving electronic payments from paymentservice providers.

It is also an object of the present invention to provide a technique tosimplify the enrollment process to receive electronic payments.

It is another object of the present invention to provide a technique toidentify payees capable of receiving electronic payments.

The above-stated objects, as well as other objects, features, andadvantages, of the present invention will become readily apparent fromthe following detailed description which is to be read in conjunctionwith the appended drawings.

SUMMARY OF THE INVENTION

In accordance with the present invention, a method and a system foraccessing a database identifying electronic payees are provided. Anelectronic payee is any individual, business, or other organization thathas provided an entity that makes payment to that payee informationenabling that entity to make an electronic payment to the payee. Inelectronic payment funds are credited to a payee without the need forpaper instructions. An electronic payment could be made via the FederalReserve Automated Clearinghouse Network, via another financialinstitution network, or a remittance network such as a credit cardnetwork. Payments made to an electronic payee can be any type ofpayment, including, but not limited to, payment of a bill issued by apayee, a point-of-sale payment for goods or services purchased via anetwork interface, and a person-to-person payment. A bill can include apaper bill as well as an electronic bill delivered via a network.

The system includes a communications interface, a processor, and adatabase identifying electronic payees. The communications interface isconfigured to receive, via one or more networks, information associatedwith electronic commerce, as will be described below. The one or morenetworks can include, but is not limited to, the Internet, a local areanetwork, a wide area network, and the public switched telephone network,as well as any other network capable of transmitting information. Theprocessor could be any type of processor capable of functioning toimplement the method as described herein, including, but not limited to,a processor as found in a typical personal computer, main-framecomputer, server-type computer, or any other type computing device. Thedatabase is a collection of information associated with electronicpayees. The database could also include other information beyond thatassociated with electronic payees, such as, for instance, informationassociated with payees that are not electronic payees.

First information identifying a payee is received. The information couldbe received from a payor or from an entity representing the payor, suchas a Web portal, financial institution, or other entity. The payor couldbe an individual, a business, or organization. A payor is an entity thatmakes payments to a payee. A payee is an entity receiving payment. Theinformation identifying a payee could include any of, any combinationof, or all of, a payee name, address, zip code, and telephone number, inaddition to other payee identifying information. The information ispreferably received by a payment service provider, though it could bereceived by another entity practicing the present invention. It shouldbe noted that the information identifying the payee could be received aspart of a payment request to pay the payee on behalf of the payor, orreceived otherwise, such as in a request to add the payee to a list ofpayees.

The received first information is processed to identify a unique payeeidentifier associated with the payee. No other payee is associated withthis payee identifier. The unique payee identifier is assigned to thepayee only after the payee responds to an invitation to receiveelectronic payments. The invitation is associated with a paper paymentmade to the payee. The paper payment could be a check or a draft. Theinvitation could be a printed invitation delivered with the paperpayment, or could be an electronic invitation such as an e-mail message.In any event, the paper payment triggers the extension of the invitationto receive electronic payments

Information associated with the payee stored in the database ofelectronic payees is accessed based upon the identified unique payeeidentifier. That is, the unique payee identifier is used to locateinformation associated with the payee contained in the electronic payeedatabase. The accessed information associated with the payee could beany information associated with the payee, including informationnecessary to make an electronic payment to the payee.

According to one aspect of the method and system of accessing a databaseidentifying electronic payees, the payee is a first payee. Secondinformation identifying a second payee is received. The second payee isnot associated with a unique payee identifier. That is, the second payeehas not requested to receive electronic payments. Information associatedwith the second payee stored in the electronic payee database isaccessed based upon the received identifying information. Thus, thedatabase is accessed two ways, by a unique payee identifier, and byreceived payee-identifying information.

According to a further aspect of this method and system, the firstinformation is publicly available information identifying the firstpayee, and the second information is publicly available informationidentifying the second payee. Thus, publicly available information isutilized to identify a unique payee identifier, which then is utilizedto access the database. Preferably, the unique payee identifier is notknown to the public. Publicly available information is also utilized todirectly access the database without the use of a unique payeeidentifier.

In another aspect of the method and system for accessing a databaseidentifying electronic payees the unique payee identifier identifies ademand deposit account belonging to the payee to which electronicpayments to the payee should be directed. Thus, the unique payeeidentifier is stored in association with information identifying ademand deposit account in the database.

According to a still further aspect of this method and system, theunique payee identifier identifies the demand deposit account as well asa remittance location to which remittance information should bedirected. Remittance information, also known as remittance advice, isinformation associated with a payment, such as a payment amount,information identifying a payor, and information indicatingapportionment of a total payment amount from a payor across differentline items or sub-accounts. However, remittance information can includeother information. The remittance location could be an electroniclocation or a physical location. The electronic location could bedifferent than the payee's demand deposit account. Thus, electronicpayments could be directed to one location, while electronic remittanceinformation associated with those payments could be directed anotherlocation. Also, payments could be electronically directed to onelocation, while remittance information associated with those paymentscould be delivered in hard copy to a physical location, which could be afax machine, physical mail box, or other type of physical location.

In an especially beneficial aspect of this method and system theinvitation is an invitation to receive electronic payments from thepayor. Also, the unique payee identifier identifies an associationbetween the payee and only the payor. The unique payee identifier,according to this aspect, does not identify an association between anyother payor and this payee. The unique payee identifier is only utilizedin relation to processing which is associated with both this payor andthis payee.

Also in accordance with the present invention, a method and a system formaking a payment to a payee on behalf of a payor are provided. A payeeas well as a payor could be any individual, business, or otherorganization. The payment can be any type of payment, including, but notlimited to, payment of a bill issued by a payee, a point-of-sale paymentfor goods or services purchased via a network interface, and aperson-to-person payment. A bill can include a paper bill physicallydelivered to a payor, as well as an electronic bill delivered to a payorvia a network.

The system includes a communications interface and a processor. Thecommunications interface is configured to receive, via one or morenetworks, information associated with electronic commerce, as will bedescribed below. The one or more networks can include, but is notlimited to, the Internet, a local area network, a wide area network, andthe public switch telephone network, as well as any other networkcapable of transmitting information. The processor could be any type ofprocessor capable of functioning to implement the method as describedherein, including, but not limited to, a processor as found in a typicalpersonal computer, main-frame computer, server-type computer, or anyother type computing device. According to certain aspects of thissystem, the system also includes a database which stores informationassociated with electronic payees. As described above, an electronicpayee is any individual, business, or other organization that hasprovided an entity that makes payment to that payee information enablingthe paying entity to make electronic payments to the payee. The databasecould be stored in any type memory, including, but not limited to, harddisk, floppy disk, and optical disk.

A payment request to make a payment to a payee on behalf of payor isreceived. The payment request could be received directly from a payor,or from an entity acting on behalf of the payor, including the payee.The payment request is an instruction directing the entity receiving thepayment request to make a payment to the payee for the payor. Thus, inaccordance with this method and system, a payor does not deliver funds,negotiable instruments, or other payment instruments directly pay apayee. Rather, a payment service provider completes funds delivery tothe payee on behalf of the payor.

The received payment request is processed to identify a unique payeeidentifier associated with the payee. As discussed above, no other payeeis assigned this same identifier. Also as above, this unique payeeidentifier has previously been assigned to the payee only after thepayee requests to receive electronic payments responsive to aninvitation to receive electronic payments associated with a paperpayment. An electronic payment is directed to the payee based upon theidentified unique payee identifier. That is, payment is made to thepayee on behalf of the payor only after the unique payee identifier isidentified. Further, the unique payee identifier is used in processingwhich results in delivery of funds to the payee.

According to one aspect of the method and system for making a payment toa payee on behalf of a payor the unique payee identifier identifies ademand deposit account belonging to the payee to which electronicpayments to the payee should be directed.

According to a still further aspect of this method and system, theunique payee identifier identifies the demand deposit account as well asa remittance location to which remittance information should bedirected. Also, the remittance location could be an electronic locationor a physical location. The electronic location could be different thanthe payee's demand deposit account. Thus, as discussed above, electronicpayments could be directed to one location, while remittance informationassociated with those payments could be directed another location. Also,payments could be electronically directed to one location, whileremittance information associated with those payments could be deliveredin hard copy to a physical location.

According to an especially beneficial aspect of this method and system,the unique payee identifier is not based upon publicly availableinformation identifying the payee. That is, the unique payee identifieris not generated or otherwise produced utilizing information about thepayee known to the public.

In another aspect of the method and system for making a payment to apayee on behalf of a payor the unique payee identifier is stored in adatabase of payees capable of receiving electronic payments. Such adatabase is described above. Information necessary to direct theelectronic payment to the payee is retrieved from the database basedupon the identified unique payee identifier. This necessary informationcould include information identifying a demand deposit account belongingto the payee, but it could include other or additional information, suchas information identifying a remittance network.

According to another aspect of this method and system, the payment tothe payee is a first payment is directed to a first demand depositaccount belonging to the payee. The invitation is an invitation toreceive electronic payments from the first payor. Also according to thisaspect, another payment request is received from another payor. Thisother payment request also requests that a payment be made to the payee,but on behalf of this other, second, payor. Information associated withthe second payor is accessed to identify a second unique payeeidentifier associated with the payee. This second unique payeeidentifier is assigned to the payee subsequent to receiving a requestfrom the payee to receive electronic payments from the second payor.Thus, the second unique payee identifier is stored in association withinformation associated with the second payor. Based upon the secondunique payee identifier a second electronic payment is directed to asecond demand deposit account belonging to the payee.

The second unique payee identifier is either the same as or differentthan the first unique payee identifier. If the first and second uniquepayee identifiers are the same, the first and second demand depositaccounts are the same. If the first and second unique payee identifiersare different, the first and second demand deposit accounts aredifferent demand deposit accounts. Thus, the payee can identify a singledemand deposit account to which payments made on behalf of multiplepayors will be directed. Or, the payee can identify multiple demanddeposit accounts, with payments made on behalf of one payor directed toa first demand deposit account, and payments made on behalf of anotherpayor directed to a second demand deposit account. In such a case, aunique payee identifier identifies not only the payee, but also a demanddeposit account belonging to the payee.

In a further aspect of this method and system, remittance adviceassociated with the first payment is directed to a first remittancelocation, while remittance advice associated with the second payment isdirected to a second remittance location. The first remittance locationcould be an electronic location or a physical location. Likewise, thesecond remittance location could be an electronic location or a physicallocation. If the first and second unique payee identifiers are the same,the first and second remittance locations are the same. If the first andsecond unique payee identifiers are different, the first and secondremittance locations are different remittance locations. Thus, similarto demand deposit accounts, remittance advice is directed based upon aunique payee identifier.

According to yet another aspect of the method and system for making apayment to a payee on behalf of a payor the payment request is a firstpayment request, the payee is a first payee, and the electronic paymentis a first electronic payment. A second payment request is received fromthe payor. The second payment request requests that a payment be made toanother, second, payee. The second payment request is processed toidentify a unique payee identifier associated with the second payee. Inthis aspect, the second payee is not associated with a unique payeeidentifier.

Information necessary to direct a second electronic payment to thesecond payee is retrieved from an electronic payee database based uponpublicly available information identifying the second payee. The secondelectronic payment is directed to the second payee based upon thisretrieved information. A payee does not have to be associated with aunique payee identifier to receive electronic payments in accordancewith this aspect of the method and system for making payment. Thus, apayee does not have to respond to an invitation associated with a paperpayment to receive electronic payments.

In still another aspect of this method and system a notice indicatingthat the electronic payment has been directed is transmitted to thepayee. This notice includes either remittance information associatedwith the payment, or a notice that remittance information associatedwith the payment is available.

According to a further aspect of this method and system, the noticeincludes a hyperlink to view the remittance information. Thus, the payeemust actively request remittance information in this further aspect.

In still another aspect of this method and system, processing thereceived payment request to identify the unique payee identifierincludes accessing information associated with the payor and retrievingthe unique payee identifier from the information associated with thepayor. Thus, the payee's unique identifier is stored with informationassociate with the payor.

According to yet another aspect of the method and system for making apayment to a payee on behalf of a payor the invitation is an invitationto receive electronic payments from the payor and the unique payeeidentifier identifies an association between the payee and only thepayor. Thus, the unique payee identifier does not identify anassociation between any other payor and the payee, according to thisaspect, as discussed above.

Also in accordance with the present invention, a database for storinginformation identifying payees capable of receiving electronic paymentsis provided. The database includes first data associated with a payeecapable of receiving electronic payments. This first data could include,but is not limited to, payee identifying information, informationidentifying a demand deposit account belonging to the payee, aremittance location associated with the payee, or a remittance network.

The database also includes second data stored in association with thefirst data. Thus, the first and second data are linked in the database.The second data includes a unique payee identifier which identifies thepayee. This unique payee identifier is assigned to the payee only afterreceipt of a request from the payee to receive electronic payments froma payor. This request to receive electronic payments is responsive to aninvitation to receive electronic payments. The invitation is associatedwith a paper payment to the payee.

In one aspect of the database the payee is a first payee. The databasealso includes third data associated with a second payee capable ofreceiving electronic payment. This second payee is not associated with aunique payee identifier. Thus, the database stores informationassociated with electronic payees that have been assigned unique payeeidentifiers and information associated with electronic payees that havenot been assigned unique payee identifiers.

BRIEF DESCRIPTION OF THE DRAWINGS

In order to facilitate a fuller understanding of the present invention,reference is now made to the appended drawings. These drawings shouldnot be construed as limiting the present invention, but are intended tobe exemplary only.

FIG. 1 is a simplified depiction of the processing of a prior arton-line payment service.

FIG. 2 depicts a prior art on-line payment service computing system.

FIG. 3 is a simplified depiction of a prior art electronic payeedatabase.

FIG. 4 depicts a check having an advertisement for receipt of electronicpayments in accordance with the present invention.

FIG. 5 is a simplified depiction of a payment service provider incommunication with first and second payors and a payee.

FIG. 6 is a simplified depiction of an initial log in screen inaccordance with the present invention.

FIG. 7 is a simplified depiction of an identity screen in accordancewith the present invention.

FIG. 8 is a simplified depiction of an electronic payee database inaccordance wit the present invention.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENT(S)

payment service provider has a built-in communication channel with anypayee receiving payment via check or draft, the check or draft itself.Thus, the check or draft is the most effective place to advertiseavailability of electronic payments for those payees receiving paperpayments. An example of a check 400 is shown in FIG. 4. To advertisethis availability, an insert could be included in an envelope whichincludes the check or draft advertising the possibility of receivingelectronic payments. Secondly a message itself could be printed on acheck or draft. Inserting a flyer into the envelope with a check ordraft has the advantage of being able to provide a more descriptivecompelling message. Printing an advertisement on a check or draft hasthe advantage of incurring no increase in stock cost and no increase ininsertion time. No matter the form of advertisement, a payee receivingpaper payment is notified of the availability of electronic payments.

In accordance with the present invention and as shown in FIG. 5, payor 1directs a payment service provider 505 to make a payment to payee 1 onthe payor's behalf by way of first payment request 502 a transmitted toa server 511. As will be discussed in detail below, the payment serviceprovider 505 determines if payee 1 can receive electronic payments. Ifnot, payment will be made by either check or draft 503. The check ordraft 503 is generated by the payment service provider 505. Informationassociated with the payment request and payment is stored in memory 516,which also stores other information. The stored information includesinformation identifying payee 1 received from payor 1.

As shown in FIG. 4, a check 400 (or draft) includes an advertisement toentice payees to register to receive payments electronically. Theadvertisement of FIG. 4 includes a payment service provider 505 websiteidentifier and an access code. Of course, as described above, theadvertisement could be delivered to the payee in an insert with check400 (or draft), as well as separate letter. If the payees fax number ore-mail address can be discovered, the advertisement could be deliveredvia either of these routes.

The access code is utilized for fraud prevention. It is most preferableto generate a random sequence of characters and numbers that can be usedas this unique access code. Use of this code ensures that someone cannotlog onto a service provider website and redirect another payee'spayments into their own deposit account without having received a paperpayment from the service provider. In addition to the access code, entryof one or more of multiple fields from the check 400 (or draft), thatwould only be known by the person receiving the check 400 (or draft), isrequired once the payee logs onto the payment service provider website.

After accessing the payment service provider website, advertised on orincluded as an insert with the check (or draft) 400, to initiate anon-line, real-time, registration session 507, payee 1 is prompted toenter preferably three data elements, check number, payment amount, andaccess code. The server 511 retrieves the stored information associatedwith the payment and determines if the correct information has beenentered. Ideally, in order to build the utmost confidence in the mindsof payees, an image of the check that looks exactly like the check inthe hands of a payee should be displayed upon a determination that thecorrect information has in fact been entered. Of course, the requireddata elements could be data which is related to the invitation, not datathat is related to the payment itself.

Payee 1, upon providing correct information, will be required toregister to receive electronic payments. Registration, in which a secureuser name and password will be issued, also allows payee 1 to viewdetails of all received electronic payments either via a web interfaceor via email. Payee 1 will also be given the opportunity to downloadthis payment detail (remittance) information, to be discussed furtherbelow. Payee 1 must provide information to the payment service provider505 during registration. This information will be stored in anelectronic payee database 515. The information includes a preferredpayee name, preferred payee address, payee telephone number, payees bankname, payees bank routing transit number, payees bank deposit accountnumber, payees primary e-mail address, any other e-mail addresses, alog-in name, and a password. Once this information has been populatedinto the electronic payee database 515, and stored in memory 516,discussed further below, payee 1 can receive payments electronicallyfrom payor 1.

During an on-line registration process, the information stored in memory516 during the payment request processing described above is retrieved.This retrieved information is used to pre-populate the on-lineregistration form completed by payee 1. In particular, the payee namereceived from payor 1 is inserted into the on-line form, the payeeaddress (remittance center) received from payor 1 is inserted into theon-line form, along with any other payee identifying informationreceived from payor 1. Also, the payor's account number with payee 1, ifreceived, is inserted into the on-line form. Thus, payee 1 does not haveto supply any of this pre-populated information received from payor 1.It should be noted that payee 1 can modify any of the pre-populatedinformation, in addition to supplying information not received frompayor 1.

In addition to the payor-identifying information received from payor 1and/or payee 1 that is populated into the electronic payee database 515,other information generated by the payment service provider 505 is alsopopulated into the electronic payee database 515. This informationincludes an alternate name for payee 1 which is only known by thepayment service provider 505. This alternate name is unique to payee 1.Use of the alternate payee name will be discussed further below.

Though a simplified on-line and real-time registration is discussedabove, a payee could also register in a non-real-time fashion. Thiscould include registration by letter, fax, or email. In non-real-timeregistration, a payee supplies the same information to the paymentservice provider as required in on-line registration. The paymentservice provider processes the received information to complete theregistration process.

It should be noted that during the registration process, whether on-lineor not, the payee must accept certain terms and conditions. Thispreferably includes a reversibility condition. If the payment serviceprovider 505 does not receive funds associated with a payment to payee 1from payor 1 subsequent to the payment service provider 505electronically crediting an account belonging to payee 1, payee 1 mustagree that the credited funds will be recaptured by the payment serviceprovider 505 from payee 1. This recapture could be by a net settlementprocedure or an electronic debit, among ways to recapture funds.

The alternate payee name, introduced above and also known as a uniquepayee identifier, is stored by the payment service provider 505 in atleast two locations. First, the alternate payee name is stored in theelectronic payee database 515 in association with other informationidentifying and associated with payee 1. Secondly, the alternate payeename is stored in memory 516 along with other information associatedwith payor 1.

As shown in FIG. 5, a second payment request 502 b to pay payee 1 isreceived from payor 1. Introduced above, upon receipt of a paymentrequest, in this example second payment request 502 b, the paymentservice provider 505 determines if the indicated payee is an electronicpayee. To accomplish this, server 511 accesses memory 516 and determinesif a unique payee identifier which identifies payee 1 is stored inassociation with information associated with payor 1. If so, and as isthe case in this example of a second payment to a now-registered payee,the unique identifier is used to access the electronic payee database515 to retrieve information utilized to make an electronic payment 560to payee 1.

It should be noted that if memory 516 did not contain a unique payeeidentifier for payee 1 (payee 1 had never registered for electronicpayment via a check or draft invitation), the electronic payee database515 is preferably accessed in an attempt to locate payee 1 based uponrules stored in a rules database (not shown in FIG. 5), as discussedabove. That is, at this point, the payment service provider 505 does notknow if payee 1 has previously supplied deposit account information toreceive electronic payments in a conventional fashion (not based upon acheck draft invitation). If payee 1 cannot be located in the electronicpayee database 515 based upon both a unique payee identifier and rules,payment would then go as check or draft, with an invitation. It shouldbe noted that information identifying a payee stored in the electronicpayee database 515 which includes a unique payee identifier is neverprocessed utilizing a rules database. Thus, the only way an entry in theelectronic payee database 515 which includes a unique payee identifieris accessed is by way of the unique payee identifier first retrievedfrom memory 516 stored in association with a payor making payment to thepayee.

It will be recognized that a payee, upon receiving multipleadvertisements to entice the payee to register to receive paymentselectronically, instead of registering as described above, may insteadcontact the payment service provider 505 directly in order to receiveelectronic payments from all current and future payors. The paymentservice provider 505 may then choose to extend the use of the sameunique payee identifier to all payors currently sending payments to thispayee. The payment service provider could identify current and futurepayments from payors to this payee and make use of the unique identifierin all such payments. Alternatively, the payee could choose to beenrolled as an electronic merchant (payee) by way of conventionalprocessing. In such a case, the payee would not be associated with aunique payee identifier. Rather, information associated with the payeewould be added to the electronic payee database and the payee would belocated in the electronic payee database 515 using conventionaltechniques, not the inventive unique payee identifier of the presentinvention.

In this example, payment is made to payee 1 electronically. Upon makingan electronic payment to payee 1, the server 511 generates an emailmessage 565 to payee 1 informing payee 1 that an electronic payment hasbeen made. Based upon this email, or at any time, payee 1 accesses thepayment service provider web site to retrieve remittance information570. This is known as a ‘pull’ scenario, in that payee 1 must requestremittance information. It should be noted that remittance informationcould also be automatically transmitted to payee 1. This is known as a‘push’ scenario. Thus, for example, the e-mail message could include theremittance information. Also, a batch transmission of remittanceinformation could periodically be transmitted to payee 1. Thistransmission could be sent via a computing network or via fax. It shouldalso be noted that payee 1 could be notified of a received payment by amethod other than email.

Whenever the payment service provider web site is accessed, an initiallog in screen is presented. This screen 600, as shown in FIG. 6,includes a link 601 for previously unregistered payees to access thepayment service provider 505 web site to register, and a link 605 forregistered payees to access the payment service provider 505 website toadd another payor, to receive remittance information, and to make anychanges to stored information associated with the payee. Forunregistered payees, activation of link 601 brings up another screen(not shown) in which the unique access code printed on a check or draftis entered. For registered payees, activation of link 605 brings up anidentity screen, shown in FIG. 7. Identity screen 700 includes field(s)710 to enter the unique user name and password assigned during theregistration process, discussed above. Upon entry of this information,payee 1 can select a link 715 to remittance information for electronicpayments made to payee 1, and link 720 to an add payor screen (notshown), in which the payee can add another payor. Adding additionalpayors will be discussed below.

The present invention supports payments to payees having multipleremittance centers by the use of multiple unique payee identifiers. Asshown in FIG. 5, payor 2 transmits a payment request 525 to pay payee 1.In this example, payor 2 has a different remittance center with payee 1than does payor 1. Upon receipt of payment request 525, the server 511performs the above-described processing to determine if a unique payeeidentifier for payee 1 is stored in memory 516 in association withinformation associated with payor 2. In this example, no such identifieris stored. Next, based upon rules, the server 511 determines if payee 1is otherwise included in the electronic payee database 515 by way ofconventional registration (not check or draft invitation). In thisexample, payee 1 is not otherwise included in the electronic payeedatabase 515. As a result, a paper payment, with another advertisementand another unique access code, will be delivered to payee 503.

Payee 1, to receive electronic payments from payor 2, must once againaccess the payment service provider's web site 507. Upon entering theweb site, payee 1 selects link 605 and then enters his or her uniqueuser name and password. Payee 1 then selects link 720 to add payor 2.Upon selection of the add payee link 720, payee 1 enters this secondunique access code. Information associated with payment request 525 isthen retrieved from memory 516, as well as information identifying thedeposit account belonging to payee 1, and displayed as a pre-populatedregistration form. At this point, payee 1 makes any necessary changesand submits the information to the payment service provider 505. Becausethe pre-populated information, in this example, indicates a differentremittance center, received from payor 2, a second unique identifierassociated with payee 1 is assigned to payee 1. This second uniqueidentifier is stored in both memory 516 and the electronic payeedatabase 515, as will be understood from the discussion above. Thissecond unique identifier is linked to information identifying the secondremittance center. It should be stressed that a single uniqueidentifier, while associated with only a single remittance center, canbe associated with multiple payors required to remit payment to thatsame remittance center.

FIG. 8 is a simplified depiction of electronic payee database 515, asshown, database 515 includes entries for payees 1 through N. Informationincluded in database 515 includes, among other information, payeeidentifying information 805, any unique payee identifiers 810, andremittance center information 815. As shown, payee 1 is associated withtwo remittance centers and two unique identifiers. Payee 2 is associatedwith a single remittance center and a single unique identifier. Payee 3is associated with a single remittance center and no unique identifier.Payee N is associated with two remittance centers and no uniqueidentifiers. Thus, payees 1 and 3 are located in the electronic payeedatabase 515 by way of unique identifiers, while payees 1 and N arelocated in the database 515 by conventional techniques, such as rulesdriven processing. Thus, the electronic payee database 515 of thepresent invention can be accessed two ways to locate a payee, by uniqueidentifier known only to the payment service provider, and by publiclyavailable identifying information.

It will be appreciated that multiple unique access codes for a singlepayee can be associated with different deposit accounts and/or differentremittance centers. It will also be appreciated that if both remittancecenter and deposit account information are the same for two payors of asingle payee, the same unique access code would be stored in associationwith information associated with each of these payors in memory 516.

For the ‘pull’ scenario in receiving remittance information 570, once apayee has accessed the payment service provider 505 web site andidentified him or herself and requested remittance information, a totalof the funds deposited on that day as well as a list of all payorsmaking payment on that day are displayed. Information associated witheach payor is also displayed. This information can include any or all ofthe following information: payor name, payor address, payor accountnumber with the payee, and payment amount. It will be recognized by oneskilled in the art that other remittance information could also bedisplayed. A payee is also given the option to enter a date in the past(preferably up to 90 days in the past) and review remittance informationsince that specified date.

It is quite likely that some of the payees will be using accountingsoftware that can import a file into an accounts receivable system. As aconvenience to payees, remittance information, preferably in the form ofa comma-delimited file, can either be pulled by a payee, or pushed to apayee.

If the payment service provider 505 cannot obtain funds from a payor,preferably in multiple attempts, the payee will be notified that thepayment will be reversed. That is, that the payee's deposit account willbe settled accordingly. The payee can access the payment serviceprovider 505 web site to obtain details of the situation. For eachinstance in which funds could not be obtained from a payor, the payeecan view the payor name, payor address, payor account number with thepayee, and payment amount.

The present invention is not to be limited in scope by the specificembodiments described herein. Indeed, various modifications of thepresent invention in addition to those described herein, will beapparent to those of skill in the art from the foregoing description andaccompanying drawings. Thus, such modifications are intended to fallwithin the scope of the appended claims.

1. A method for making a payment requested via a wide area network onbehalf of a payor, comprising: receiving, by a payment service providervia a network, a request for the payment service provider to make apayment to a payee on behalf of the payor; determining, by the paymentservice provider, whether or not first payee identity information forthe payee to be paid pursuant to the received request, which is includedin first data associated with the payor, has an associated indicatorindicating that the payee to be paid is payable by crediting that payeevia electronic funds transfer; if it is determined that there is noindicator, determining, by the payment service provider, whether or notrespective second payee identity information included in second dataassociated with and identifying multiple payees payable on behalf ofmultiple payors by crediting via electronic funds transfer, identifiesthe payee to be paid; and if it is determined that the payee to be paidis identified, directing, by the payment service provider, the requestedpayment on behalf of the payor by crediting, via electronic fundstransfer, a deposit account represented by deposit account informationassociated with the respective second payee identity informationidentifying the payee to be paid included in the second data.
 2. Themethod of claim 1, wherein: the received request for the payment serviceprovider to make the payment to the payee on behalf of the payorincludes a name of the payee; and the payee name included in thereceived request corresponds to the first payee identity information forthe payee to be paid that is included in the first data.
 3. The methodof claim 1, further comprising: if it is determined that the respectivesecond payee identity information included in the second data does notidentify the payee to be paid, directing, by the payment serviceprovider, the requested payment by check or draft payable to the payeeto be paid.
 4. The method of claim 1, wherein: the electronic fundstransfer is an ACH transfer.
 5. The method of claim 1, wherein: theindicator is a unique payee identifier for the payee to be paid.
 6. Themethod of claim 5, further comprising: if it is determined that theassociated unique payee identifier is included in first data,determining, by the payment service provider, the deposit accountrepresented by the deposit account information which is included in thesecond data in association with unique payee identifier determined to beincluded in the first data; and directing, by the payment serviceprovider, the requested payment by crediting, via electronic fundstransfer, the determined deposit account.
 7. The method of claim 6,wherein: the electronic funds transfer is an ACH transfer.
 8. A systemfor making a payment requested via a wide area network on behalf of apayor, comprising: a first data store, associated with the payor, havingfirst payee identity information for a payee; a second data store,associated with payees, having respective second payee identityinformation identifying each of multiple payees payable on behalf ofmultiple payors by crediting via electronic funds transfer andrespective deposit account information associated with the second payeeidentity information identifying each of the multiple payees; and aprocessor configure to (i) receive, via a network, a request to make apayment to the payee on behalf of the payor, (ii) determine, responsiveto the received request, whether or not the stored first payee identityinformation for the payee has an associated indicator indicating thatthe payee is payable by crediting via electronic funds transfer, (iii)if it is determined that there is no associated indicator, determiningwhether or not the respective second payee identity information in thesecond data store identifies the payee, and (iv) if it is determinedthat the respective second payee identity information identifies thepayee, directing the requested payment by crediting, via electronicfunds transfer, a deposit account represented by the respective depositaccount information associated with the respective second payee identityinformation identifying the payee in the second data store.
 9. Thesystem of claim 8, wherein: the received request to make the payment tothe payee on behalf of the payor includes a name of the payee; and thepayee name included in the received request corresponds to the firstpayee identity information in first data store.
 10. The system of claim8, wherein: the processor is further configured to direct the requestedpayment by check or draft payable to the payee, if it is determined thatthe payee is not identified by the respective second payee identityinformation in the second data store.
 11. The system of claim 8,wherein: the electronic funds transfer is an ACH transfer.
 12. Thesystem of claim 8, wherein: the associated indicator is an associatedunique payee identifier for the payee to be paid.
 13. The system ofclaim 12, wherein: the second data store also has a respective uniquepayee identifier associated with the respective deposit accountinformation associated with the second payee identity informationidentifying each of one or more of the multiple payees; and if it isdetermined that the first data store has the associated unique payeeidentifier, the processor is further configured to direct the requestedpayment by crediting, via electronic funds transfer, the deposit accountrepresented by the respective deposit account information associated, inthe second data store, with the unique payee identifier determined to bein the first data store.
 14. The system of claim 13, wherein: theelectronic funds transfer is an ACH transfer.
 15. A networked system,including multiple network stations interconnected by a wide areacommunications network, for making a payment requested via the networkon behalf of a payor, comprising: a first data store, associated withthe payor, having first payee identity information for a payee; a seconddata store, associated with payees, having respective second payeeidentity information identifying each of multiple payees payable onbehalf of multiple payors by crediting via electronic funds transfer andrespective deposit account information associated with the second payeeidentity information identifying each of the multiple payees; a firstnetwork station, representing the payor, configured to transmit, via thenetwork, a request to make a payment to the payee on behalf of thepayor; and a second network station, representing a bill payment serviceprovider, configured (i) to determine, responsive to the transmittedrequest, whether or not the first payee identity information for thepayee in the first data store has an associated indicator indicatingthat the payee is payable by crediting via electronic funds transfer,and (ii) if it is determined that there is no associated indicator, todetermine whether or not the respective second payee identityinformation in the second data store identifies the payee, and (iii) ifit is determined that the respective second payee identity informationidentifies the payee, to direct the requested payment by crediting, viaelectronic funds transfer, a deposit account represented by therespective deposit account information associated with the respectivesecond payee identity information identifying the payee in the seconddata store.
 16. The networked system of claim 15, wherein: thetransmitted request to make the payment to the payee on behalf of thepayor includes a name of the payee; and the second network stationdetermines that the respective second payee identity information in thesecond data store identifies the payee based on a correspondence betweenthe payee name included in the transmitted request and the respectivefirst payee identity information in the first data store.
 17. Thenetworked system of claim 15, wherein: the second network station isfurther configured to direct the requested payment by check or draftpayable to the payee, if it is determined that the respective secondpayee identity information in the second data store does not identifythe payee.
 18. The networked system of claim 15, wherein: the electronicfunds transfer is an ACH transfer.
 19. The networked system of claim 15,wherein: the associated indicator is an associated unique payeeidentifier for the payee to be paid.
 20. The networked system of claim19, wherein: the second data store also has a respective unique payeeidentifier associated with the respective deposit account informationassociated with the second payee identity information identifying eachof one or more of the multiple payees; and if it is determined that thefirst data store has the associated unique payee identifier, the secondnetwork station is further configured to direct the requested payment bycrediting, via electronic funds transfer, the deposit accountrepresented by the respective deposit account information associated, inthe second data store, with the unique payee identifier determined to bein the first data store.